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The cornflower-blue, kid-leather Donna Karan handbag dangles from her fingers.
"I don't want it. I don't need it. I don't even particularly like it," she says. "But it's Donna Karan--not just DKNY, but Donna Karan--and it's perfect."

She turns to her girlfriend--who stands mutely, draped in four designer scarves and a 100 percent camel-hair overcoat at least two sizes too big--and asks, "What am I going to do?"

The answer floats across the store aisle from a dark-haired shopper pushing a cart loaded with blouses: "Buy it."

Ultimately, though, she passes on Donna Karan, finding, instead, a pair of suede Stuart Weitzman loafers ($29.99) and a leather Ralph Lauren wallet ($9.97).

This is the Impossible Dream of shopping. This is Last Chance Bargain Shoes and Apparel, a grungy basement at Phoenix's Camelback Colonnade where, every day, 62 Nordstrom department stores and 20 other Nordstrom venues from around the country ship merchandise their patrons have returned so it can be resold at phenomenally, amazingly, unbelievably low prices.

Like $89.99 for an $8,500 full-length mink. Or $19.97 for a $600 Nicole Miller ball gown. Or $4.97 for a $650 Gucci watch.

At Last Chance, nothing is more than $100, but the store is hardly a Blue Light special. Part yard sale, part designer boutique, part coffee klatsch, Last Chance is unique in our consumer culture. Indeed, it has its own culture--its own rules, its own vernacular, its own stormy tales of betrayal and obsession and greed--fueled by Nordstrom's magnanimous return policy and rooted in an overwhelming desire.

The desire--no, the urge--no, the need--to possess.

John W. Nordstrom migrated from Sweden to the United States at the age of 16, with $5. He traveled west, eventually to Alaska, where he made $13,000 in the 1897 Klondike gold rush.

With that, he opened a shoe store in Seattle in 1901. John's three sons--Elmer, Everett and Lloyd--turned that one store into a successful chain of retail shoe outlets. The third and fourth generations of the Nordstrom family expanded the shoe business into a national chain of high-end department stores.

The name Nordstrom has become synonymous with customer service. The so-called urban legend regarding Nordstrom's liberal return policy--that the apparel store once took a car tire back from a customer--is actually true. Nordstrom had acquired a store that once sold tires and gave the woman back her money, even though tires were no longer sold there.

An entire book has been written on the subject of Nordstrom's famed service--The Nordstrom Way: The Inside Story of America's #1 Customer Service Company, published in 1995. The authors tell the tale of a customer who fell in love with a pair of Donna Karan pants, which happened to be on sale at the Nordstrom store she was shopping. Her size was not available. The clerk called other Nordstroms, and after failing to locate the pants in the proper size, took petty cash to a nearby department store--a competitor--purchased the pants at full price and sold them to the Nordstrom customer.

At Nordstrom's sale price.
There's an ongoing debate in the retail industry: Does fabulous customer service pay for itself, or does it cost the company more money?

Saul Yaari, a retail analyst with Piper Jaffray in Minneapolis, suggests that Nordstrom's liberal return policy could be affecting profits at the $4.1 billion firm, at least a bit. Other analysts contend that the chain's hallmark customer service more than pays for itself over the long run.

Whether profitable or costly, Nordstrom's customer-pleasing policies produce a continuous deluge of returns that is never resold at the department stores. Even the Nordstrom outlet chain--the Rack--refuses to sell merchandise customers have traded in.

The returns from these 80-plus venues go to the one and only Last Chance. A stroll through the Phoenix basement-bargain showplace tells you just how liberal Nordstrom's return policy is.

First comes the stench of old shoes. Then the stained, snagged ball gowns, the broken purse straps, the ripped coat linings.

But a bit of searching reveals a few items that could pass for brand-new. And some of those items bear elite brand names and absurdly low prices.

At Nordstrom, shoppers can return almost anything, no questions asked.
At Last Chance, all sales are final.
But that doesn't keep hundreds--sometimes thousands--of people from flocking to the clearance store every day, starting very early every morning.

The metal, gratelike gates of Last Chance don't rise until 9:30 a.m., but on a typical day, anywhere from 75 to 250 people will have gathered outside the entrance before then to gossip, read the paper, drink coffee and wait for The Opening.

The chatter dims at 9:25. On a Tuesday in mid-January, a squat man in blue emerges from the bowels of the store, untangles the cord on a karaoke machine by the cash register and clears his throat.

"Hello--can you hear me over there? Over there in the back--with the sunglasses on your head--can you hear me? Okay. First, I want to say good morning. Basically, the big rule here at Last Chance--because it is a competitive shopping environment, as we say--the big rule in the morning, no running. And no fast walking. That will be considered running. . . . You will be asked to leave. So, have a good time. There is a lot of merchandise--you really don't have to fight over it.

"And, please, no running this morning, or, like I said, you will be asked to leave."

The vultures (an employee nickname for the dozen or so all-day, every-day shoppers) press closer to the gate. Despite repeated warnings, when the gates finally move, bodies push inside with an audible whoooosh. Then silence, as one group moves to the rows of purses hanging on the far left wall, another to the men's suits in the back, another to a rounder of leather coats in the middle.

This is easily the most economically, ethnically and socially diverse gathering in town. Patrons range from recent law school graduates to top government officials, from grocery-store checkers to socialites, from migrant farm workers to television anchors.

Until the 9:30 p.m. closing (except on Sundays, when hours are 10 a.m. to 6 p.m.), shoppers will move in and out. Often, the line to pay for purchases stretches the length of the store.

But mornings are always the craziest.
Brad Jones watches the action from the top of the stairs, as he has almost every morning since the day after Thanksgiving 1995. That was when he set up his coffee cart, Java Jive, to take advantage of the Last Chance crowd. Along with cappuccino and mocha, Jones serves up directions to the rest rooms and information about Last Chance. Not unlike the bartender in the neighborhood pub, Jones knows his customers' names and regular drink orders by heart. Instead of baring their souls, though, they show him their purchases.

Jones has a wife, a kid, wire-rimmed glasses, bangs in his eyes and a philosophy degree from Arizona State University. He's the unofficial, self-anointed Last Chance historian. He's been at Camelback Colonnade almost as long as Last Chance has.

Jones knows that the Catholic high school girls refer to Last Chance as "The Chance." He knows that when the girls want to go shopping, they say it this way: "Let's Chance it."

He knows about the best deals:
"I've heard stories--confirmed stories, mind you--of Hugo Boss suits for men. And I have heard an unconfirmed report of an Armani."

He knows about the best method of shopping:
"You don't necessarily spend a long time there. You just make frequent appearances. It's either that, or spend all day there."

He's seen the strangest tricks for getting the best stuff:
One man stood outside before Last Chance opened and used a telescope to spot choice merchandise that he could immediately seize when the store gates went up.

"There was a woman who brought opera glasses, who I think was much more clever," Jones adds, "because she could simply fold those and put them in her pocket, whereas the telescope--that might get damaged in the rush. You can't run quite as fast with a telescope as you can with opera glasses."

And Jones has come up with his own philosophy of the place:
Finding Last Chance, he believes, is kind of like finding the back door to the club that would never let you in. The problem is that all the other riffraff has found the back door, too.

"The stuff is devalued, in a way, because all around Last Chance you see people who you know don't have very much money, who didn't spend very much money, having all these things that in any other city would be considered a status symbol."

Last Chance has changed a lot in just a year, Jones says, affecting a Yiddish accent that comes out like an Irish brogue: "'Oh, yeah, this is fine, but you should have been here back in the good old days when it was really hard core, and the competition was tough! We used to fight for those things, I tell ya! We'd scurry on the floor!'

"And the thing is," he adds, "they really did. I saw it happen. It was only a year ago."

In fact, the store's pre-opening announcement and admonishments against running are relatively new responses to the unfortunate tendency of some shoppers to--actually--drop on the floor as the Last Chance gates rose, crawling on their bellies to the purses, which at that time were located just inside the store. Today, the purses are on a far wall, and customers are not allowed to enter the store until the gates are pulled up all the way.

"There was never like a Three Stooges pileup," Jones recalls. "But there was, you know, a damn good pratfall, a kind of individual performance. These are the kind of people that, if they did that at any other time in their day, or any other place, they would stop, and they would make sure that they were okay, and people would be like, 'Are you okay? Wow, that looked like a bad fall.'

"At Last Chance, when the gate was still moving like that, it was just, get back on your feet as fast as you can and keep on. It was like the Olympics or something."

One thing that hasn't changed is the interaction--both positive and negative--among shoppers. As unofficial Last Chance historian, Jones can cite chapter and verse on the pulling and tearing and bruising that still go on inside.

Or he can summarize: "Some spiteful shit happens down there."
Nordstrom plans to open a department store late next year at Fashion Square in Scottsdale. It will feature a concierge, live piano music, an espresso bar, a spa and valet parking.

You can't find any of those amenities at Last Chance. In fact, you can't find even the Nordstrom name. Not on the store's sign, its bags or its receipts.

Conversely, the name Last Chance is noticeably absent from Nordstrom's most recent annual report to the U.S. Securities and Exchange Commission. The store is listed merely as a "clearance" center located in Arizona. No description, no financial statements. And Nordstrom's public relations department will say almost nothing about Last Chance, aside from acknowledging that the store first opened at west Phoenix's Maryvale Mall in 1993, that it relocated to Camelback Colonnade in 1995, and that the clearance venue sells returned merchandise and some overstocked items.

Edward Weller, a retail analyst with Robertson Stephens in San Francisco, has a simple explanation for the official silence about Last Chance.

"It's an embarrassment," he says. "It undermines much of the image and the feel they want associated with Nordstrom and the Nordstrom name. And as a consequence, they have always been real low-key about it."

A lot of Last Chance shoppers would like to keep connection to the place similarly unpublicized.

Lisa, for example, refuses to allow her real name to be used for this story. Why should anyone else know what she paid for that Armani blouse? Or that her trips to Last Chance have become increasingly frequent and increasingly embarrassing.

A public relations consultant, Lisa used to shop at Ann Taylor and Banana Republic once or twice a month. A couple of times a year, she'd go to Neiman Marcus for that department store's big sale "Last Call." She'd heard about Last Chance when it was still in west Phoenix, but never made it to the store when it was located on the west side. Then she read that the store had moved to Camelback Colonnade, near her central Phoenix home, and stopped by early last year. At first, Lisa didn't think the place was much different from Marshall's or Ross Dress for Less or any of the other discount stores in town.

Except for the smell.
"I was initially disappointed and revolted at the same time," Lisa recalls.
After 15 minutes, though, she'd found a pair of black velvet Ferragamo pumps for $19.99 (retail, $175). By the end of the night, she'd found three pairs of Ferragamos, and had to force herself to put two back.

Three or four weeks later, she returned. On her third visit, Lisa discovered an Eileen Fisher blouse for $4.99 (retail, $100 and up). By last December, Lisa was stopping by Last Chance at least three times a week.

"I live two miles away. So it was on my way to work, and on my way home from the gym. It's smack dab in the middle of my life."

She bought her sister and mother Coach purses for Christmas; her husband got Egyptian cotton dress shirts; it was tiny, pale-blue Dr. Marten boots for a friend's child.

She couldn't stop.
"I would get obsessed with finding one article [of clothing] at a time," Lisa says. She spent six weeks searching for the perfect pair of brown Dr. Martens. She found them, then moved on to her quest for a Donna Karan purse.

Part of the fun, she says, is finding the right item in the right condition.
"Some of the purses, you have to smell the inside, 'cause they have mildewed, or I think at some point someone's probably thrown up in a couple of those bags," she admits.

She also admits she's gotten a little carried away.
"The more you go, the more you go," says Lisa, who grew up in Las Vegas and knows an addict when she sees one--even when she sees her in the mirror.

"It's not the real world. The possibility is there to own things that you've always wanted, but never could afford. You can now own in three different colors. And, you know, in our consumer society, it's a really cool feeling."

Like the feeling she got the day she put her hand on a butter-yellow, lamb-leather jacket with a detachable fox collar.

No flaws.
Never worn.

On an out-of-town business trip a week later, she made a special trip to a Nordstrom store to price the jacket.

"The problem is, I love the jacket, you know, but I think I love the rush of getting the jacket more," Lisa says. "That's the problem with Last Chance. You're always going back for the rush."

Now, Lisa also owns a Calvin Klein overcoat, an Isaac Mizrahi blazer and a Kate Spade tote bag. Et cetera.

After about six months of shopping at Last Chance, Lisa began to see the same people--both men and women, but mainly women--over and over. She noticed that they had broken off into cliques.

"They know each other," Lisa says. "They show each other what they got, they trade things. They ask each other how their families are, how their husbands are. Did their husband know they were coming today? Did they get the stuff done at home before they came so their husband wouldn't yell at them?"

Last Chance addicts have been known to buy industrial clothing racks for their purchases. Lisa hasn't gone that far, but often she stops at a nearby store to buy clothes hangers. She's running out of room in her closet. She hasn't worn most of what she's bought.

She's trying to cut back. Really.
"I don't impulse there anymore," she says. "Part of it is the thrill of finding stuff, but unless it's just really incredible, I'm not going to buy it anymore, 'cause I end up with a bunch of crap. Nice labels, but crap."

Nordstrom has turned in a sluggish financial performance in the past couple of years, a down period that retail analyst Saul Yaari attributes to poor sales in the Pacific Northwest, where most Nordstrom stores are located, combined with a revamping of the chain's women's clothing department.

Yaari predicts that the $4.1 billion company will show a slight gain overall for 1996, but, he says, "it's at the bottom of the range for upscale department stores."

Earnings should improve as Nordstrom continues to move into new markets around the country, Yaari says, including Scottsdale. The new Nordstrom store won't open there for almost two years, but there's already a buzz in town. An architect's rendering of the store is on display at Fashion Square. On a recent weekday evening, a crowd gathered around, oohing and aahing.

No one oohs or aahs at the sign in the stockroom at Last Chance reminding employees that they work for Nordstrom and are expected to provide Nordstrom's requisite, high level of customer service. There is no oohing or aahing, because at Last Chance, employees often serve customers by refereeing fights over merchandise, or yelling at customers to slow down and quit pushing. At Last Chance, employees and customers have fought over merchandise (most recently, a Hugo Boss topcoat that a worker and a patron both wanted to buy).

And sometimes at Last Chance, working the floor can be downright dangerous.
Merchandise is put out all day, every day. Stockers can barely keep up with the demand--or keep out of the way. Almost every day, there are sprains and cuts and scrapes caused by greedy shoppers unwilling to wait for the employees to set merchandise down before setting upon it.

Pat, who's worked at Last Chance for about 18 months, says that once he was stocking a handful of leather coats: "And I told everyone, 'Step aside, you can touch it the second I put it on the rack.'

"Made room, stuck everything on the rack. This guy that looks like Grandpa Walton comes in and just grabs them all and breaks all the hangers and just takes off. And we ended up running him down and taking them back."

But Last Chance is not just shopping carnage; many patrons come day after day as much for the store's social aspects as for its bargains (although Pat claims to know quite a few $100-a-day addicts).

"They stand around, they talk. We're a big topic of gossip for them. They love our social lives, love talking about us."

But isn't it all a bit pathetic?
"A lot of the people have no one else. I know a really nice lady in her 60s, she's divorced, she doesn't really have a whole lot of things to do anymore. So she comes in and stands around and talks. It is kind of sad for some people, but in other ways, it's really not a bad alternative for what they could be doing."

Last Chance's employees have divided the regular shopping cliques into four categories: the Mafia, the Egyptians, the Planet of the Apes and the Jewish Mafia. These ultrapolitically incorrect names are inspired by ethnicity, although Pat admits to not being sure about the true background of the "Egyptians."

"None of these people particularly like each other. They all interact, forcibly, because they're there. We've had all sorts of little skirmishes between them. We've had people crying; we've had people holding items all day, so the other one won't get it."

The cliques organize their ranks, Pat says.
"One will watch the cart, another will be the lookout [for incoming merchandise] . . . One'll call the other ones and say, 'It's a good day, come down.'"

Often, members of one clique will accuse members of another of being "in" with the employees, who allegedly tip them off when particularly good stock is on its way to the floor. And, Pat acknowledges, inside information is sometimes disseminated. It's just human nature.

But there's one shopper who never gets tipped off to anything: the Weasel, a short, red-haired man who was permanently banned from Last Chance after he tried to resell suits--inside the store, before he'd even purchased them.

"Nobody liked that guy," Pat says. "Everyone has their people they like, but nobody liked that guy."

Brad Jones--the Last Chance historian--is also Brad Jones, the Last Chance addict. Like many addicts, he claims he never cared about clothes before he got his Last Chance.

"I'm the kind of person, if I have three pair of pants that fit, that's all I'll wear. I just make sure they're clean. Last Chance, however, changes things like that," Jones says.

The philosopher in Jones comes out--in a big way--when he talks about Last Chance.

"I have this terrible anxiety about making a bad decision about buying something," he says. "It's a terrible way to live. In philosophy, it's referred to as hedonistic calculus. You weigh so many options, and you try to look at all of the consequences to such a great extent that you paralyze yourself from being able to make a decision. . . . The nice thing about Last Chance is, it doesn't matter, because if you buy something down there, you've spent so little money.

"Even if you only wear it that one day that you wear it and think, 'You know, I just feel stupid in this!' you're only out a couple of bucks."

Since he was working just upstairs from the store, it was so easy for Jones to wander down to Last Chance. Every day. A lot. Friendly employees would tip him off when the good stuff came out of the stockroom. That's how Jones got his Swiss army watch, for $4.97.

"A snob was born," he says.
Jones has sharply curtailed his visits downstairs, but not before laying in a supply of goods that should last him well into the next century.

Like many Last Chance addicts, Jones now owns a number of articles of clothing designed for much colder or wetter climates than Phoenix's. And like many Last Chance addicts, Jones has a rationalization for every purchase:

"I'm getting ahead. I bought the kind of shoes that you see in the catalogues--the L.L. Bean catalogues--those, that are made for walking in wet snow and mud, with the kind of buckly bottom, and the kind of plastic --"

Duck shoes?
"Duck shoes," he confirms. "I've got 'em. Never needed them, no. But I figure now that I'm grown up, my feet probably won't change sizes anymore. So someday I'll go somewhere, and I've got the shoes."

At least once a day, someone sidles up to Brad Jones' coffee cart, and asks that fateful question that gnaws at every Last Chance shopper:

When the Nordstrom department store opens in Scottsdale, will Last Chance close in Phoenix and relocate to another city?

Nordstrom spokeswoman Paula Stanley says, "It's really too soon to say, although right now we don't have plans to do anything."

Jones hopes Phoenix will always have a Last Chance, but he's a realist.
"I tell people, 'Last Chance is too good to be true. It's its own little world; enjoy it while it's here, because this is not reality. It's gonna go away someday, and we're never going to see anything like it again.'

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